By JANE MCCLURE
Irgens, a Milwaukee-based developer, will help redevelop the Midway Center site. The St. Paul Port Authority Board voted Mar. 28 to approve a joint development agreement with Irgens and the Minnesota United soccer team.

The vote was by Capital City Properties, a Port real estate subsidiary that will negotiate and enter into a contract with Irgens.

If all goes as planned, the partners will eventually buy 16.5 acres of the Midway Center superblock. That means tearing down the center section that house the Rainbow supermarket and stores to the east. That would make way for the north end of the planned stadium, as well as green space and mixed-use development. It could also give a needed boost to eventual redevelopment of the entire 34.5-acre superblock bounded by Pascal St. and St. Anthony, Snelling and University avenues.

Irgens is a veteran developer, with a long track record in medical office and retail development around the nation. A company spokesperson said the developer is excited to be part of the Midway project, which is anchored by a $150 million Major League Soccer stadium for Minnesota United.

“It’s a great area,” said Irgens representative Christopher Bowen, “and we see a lot of good synergies here. We’re excited to be part of the project.”

The company will have 60 percent ownership in the joint venture, Minnesota United will have 30 percent, and the Port Authority will have 10 percent.

After the vote Port President Lee Krueger praised the agreement, saying that about 20 developers were spoken with about partnering on the site. Earlier this year the Port entered into a master lease with shopping center owner RK Midway, to jump-start the development project and get the stadium moving.
Krueger said the Port’s intent is to step aside when the time comes for the team and Irgens to buy property. The Port won’t have a financial involvement. He described the agency’s role as that of a conduit.

Irgens will be the day-to-day shopping center manager and has the right to buy out the other partners by the end of 2022. The Port hopes to exit the partnership by year’s end.

Port documents indicate that redevelopment could include a mix of “housing, retailers, restaurants, medical office, entertainment and athletic facilities.” It’s also indicated that stadium construction would get started this summer. It’s expected that Minnesota United will continue to play in Minneapolis in 2018 as well as this year, with games here starting in 2019.

The new shopping center partnership is to pay Midway Center owner RK Midway of New York $2.3 million per year, which is what current leases generate. The managing partners can, under the agreement, seek new and additional tenants.

Another part of the package would have Irgens and RK Midway redeveloping space along Snelling, which was subdivided from the main shopping center a few years ago. The center has several outlots, including the restaurant and multi-tenant building along University.

What affects the development timetable is the existing leases, especially that of Rainbow, which is owned by SuperValu. With SuperValu also owning Midway Cub, the grocery chain likely wouldn’t want a competitor moving into the new development. Midway Center has vacant space that will remain standing after stadium construction gets underway. But if and how tenants would be moved elsewhere or bought out remains a question mark.

“The Port Authority’s selection of Irgens, which has demonstrated a commitment to a vibrant, environmentally sustainable development and thoughtful building design, brings another exciting entrant to the St. Paul market,” said St. Paul Mayor Chris Coleman in a statement. “Irgens has a commendable track record of developing mixed-use, transit-connected projects. Like so much of the work that we’ve done in St. Paul, the Snelling-Midway project is a responsible and bold step toward St. Paul’s future.”

In the meantime, the soccer stadium’s needed tax breaks continue rolling through the 2017 Minnesota legislature. The House in late March approved a tax bill that includes the stadium’s property tax break and a break on construction materials sales taxes.

Minnesota United lead owner Bill McGuire has said in the past that the project cannot proceed without tax breaks. The team is seeking a property tax exemption a well as a sales tax break on project construction materials.

The Minnesota Department of Revenue has estimated that the stadium would generate about $3.1 million in property taxes per year if it were not exempt.

The stadium tax break ran up against some last-minute opposition Mar. 30 as Rep. Cal Bahr (R) Anoka attempted to delete both tax exemptions. He argued for not lowering the property tax base but fell short in a bid to remove the stadium-related amendments. The bill goes on to the Senate.
Gov. Mark Dayton is in support of the stadium tax breaks.